Comparative vs Absolute Advantage: Key Concepts in Trade Economics

What is the primary focus in international trade between countries?

• Benefiting only the faster country

• Exchanging cultural values

• Maximizing individual profits

• Mutual benefits for both trading countries

Which type of advantage focuses on the cost of not producing something?

• Absolute advantage

• Comparative advantage

• Economic advantage

• Production advantage

What does absolute advantage mean in economic terms?

• Producing a good at lower costs

• Producing more of a good with the same resources

• Having no competition in production

• Trading goods internationally

In the provided example, which country has an absolute advantage in coffee production?

• Country A

• Neither country

• Both countries

• Country B

What does a country with a comparative advantage in a product typically give up?

• A larger amount of another product

• The same amount of another product

• No other products

• Less of another product

What is the main goal of both absolute and comparative advantages?

• To reduce international trade

• To increase national output

• To import more than export

• To focus solely on domestic production

Which country is noted for having a significant advantage in the production of milk and meat from grass-fed animals?

• Japan

• Democratic Republic of the Congo

• Indonesia

• Ireland

Which country is the largest supplier of charcoal globally?

• Democratic Republic of the Congo

• Japan

• Indonesia

• Ireland

Which country has a comparative advantage in tin production?

• Indonesia

• Ireland

• Japan

• Democratic Republic of the Congo

How do absolute and comparative advantages contribute to economic success?

• By increasing dependency on imports

• By enhancing national production and trade

• By focusing on domestic consumption only

• By limiting trade to specialized products